Long-term care planning isn’t something that most people think about until they need to get some type of care assistance. The issue with this is that the individual might not qualify for Medicaid care because of their assets.
Medicaid is a program that is needs-based, so people who have significant assets won’t qualify for the assistance. Some individuals think that they can just give things away or sell them so they qualify; however, even this isn’t possible because of the lookback period.
What is the lookback period?
The Medicaid lookback period is a 60-month term during which anything that you sell, give away or transfer to another person or entity is considered as part of the application for Medicaid. If you only need home care benefits, the lookback period as of Oct. 1, 2020, is 30 months instead of 60 months.
Any assets that are sold or given away during the lookback period will reduce the benefits that you receive. For example, if you give away $20,000 worth of assets during that time, you will have a $20,000 reduction in benefits. This means that if your long-term care facility costs $8,000 per month, you won’t receive coverage for 2.5 months since $8,000 x 2.5 = $20,000.
What’s the cost of care assistance in New York?
There are a few different median costs that might interest people who want to understand why Medicaid planning is so important. Without coverage, these costs have to be paid out-of-pocket.
According to Genworth, the median costs of these services in New York in 2019 were:
- Home health aide: $4,957
- Homemaker services: $4,767
- Assisted living: $4,630
- Adult day health care: $1,842
- Semi-private room: $11,613
- Private room: $12,349
How does Medicaid planning work?
Medicaid planning is a tool that you can use to protect your assets for your heirs. One option that some people use to do this is setting up trusts. This enables them to pass down the assets without it impacting their ability to get the Medicaid coverage they need.
The lookback period means that you need to start thinking about ways that you can preserve your assets as early in your life as possible. This isn’t something that should be put off because you never know when you’re going to need assistance covering the costs associated with long-term care.
